China's stealth fighter

Beijing's interest in euro zone debt

07 Jan 2011 15:30 GMT

Is this YouTube video proof that China has developed a stealth fighter jet? The origin of the video is unclear but the fact that Chinese censors allowed it to be posted on domestic websites indicates that&nbspit may have been leaked with the approval of the authorities.

The aircraft is seen taxiing around the airport at the Chengdu Aircraft Institute.

Last month, The Wall Street Journal published a fascinating article about China cloning Russian Su-27 fighter jets. While China has been quick to reverse engineer some of Russia’s technology, it appears that it may not be able to do the same with the engines.

And that may be the key reason for Beijing’s willingness to bailout debt-ridden euro zone nations.

China’s leader in waiting Li Keqiang is in Europe visiting Madrid, Berlin and London. In an editorial in Spanish newspaper El Pais, Li gives the official reason:

"China is a responsible, long-term investor in the European financial market and particularly in Spain, and we have confidence in the Spanish financial market, which has meant the acquisition of its public debt, something which we will continue to do in the future."

"Their leaders are going over saying 'we are here for you'. But you know this is much more about the Chinese wanting to show they are part of the solution and being helpful so that they can get the European arms embargo lifted off&nbspChina."

"This is something that a number of European countries have wanted to see ended for while the French of course stand to gain considerably from potential arms sales to China.

"However, the likelihood of anything really moving the Europeans in that direction is very low. The US pressure on its allies within the European Union — such as the United Kingdom, but also other NATO member states — would be extreme, and therefore it is quite unlikely that the Europeans will be able to get the unanimity necessary to overturn the embargo."

There is little evidence of how much debt China has bought from a distressed euro zone, but there is little doubt that China is making advances in reshaping its neighbourhood.